Brazil's central bank has released a new research paper that details possible use cases for blockchains and distributed ledgers while outlining how various available platforms could be used to test the technology.
The result of a study group initiated by Banco Central do Brasil and published August 28, the report looks at use cases for DLT including identity, local currency and settlement – though, just the latter was ultimately recommended for prototyping.
The objective, however, is not to design a primary settlement platform for the central bank, but to create a "minimal" backup system for funds transfer in the event of a "complete main [settlement system] meltdown."
The report states:
The authors indicate that the design of this system includes a permissioned blockchain network in which financial institutions and the central bank itself are the validating nodes.
They study concludes that, although privacy is a potential issue, DLT "could make possible to create a unique shared view of a large variety of information fed and replicated across institutions."
In this way, the paper is in line with studies commissioned by other global central banks.
Brazilian currency image via Shutterstock
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